PAID Blog, published by CGP, focuses on the role of private actors such as corporations, foundations, charities, religious organizations, NGOs, individuals, and remittance senders, in international development.

Tuesday, October 27, 2009

With energy prices rising and the obesity epidemic growing, more and more Americans are getting out of their cars and onto their bicycles. The convenience and affordability of bicycles attracts everybody from college students to CEOs. Ironically, in the US where automobiles were conceived, the population is beginning to embrace the “less developed” form of transportation. And while bicycle popularity is growing in the states, it’s also growing abroad, perhaps even in tandem. The number of international development organizations who focus their work around this two-wheeled locomotive is rising, and rightly so.

CGP recently had one of its interns research the number of bicycle oriented international development organizations. The multitude of these organizations was surprising. Just from a quick search, the intern found nearly 30 non-profits who base their international development work on distributing this method of transportation. Organizations such as the Village Bicycle Project, Bikes without Borders, and Bikes of the World are not only alike in their bicycle oriented development projects, but also these non-profits are largely surviving on donations and volunteer work. The model is quite similar across the board, the organizations collect donated bikes, bike parts and other useful bike related materials, and send them overseas to underserved populations in developing countries. The organizations who collect the bicycles in the U.S. often partner with local non-profits in developing countries to distribute the bikes to populations in need. Depending on the organization, bicycles are either donated to their recipient, or better yet sold at a low cost. Selling the bicycles not only creates sustainability of the programs, but also ownership of the bikes. Some organizations, such as Pedals for Progress partner with local microfinance organizations to sell bikes and link them with business development, while organizations such as Bamboosero have launched entire bicycle based businesses in developing countries by promoting the production and sale of bamboo bikes. Another organization, Pepy Ride, not only provides bicycles for children to ride to school, but is supported through the bicycle tours it gives to tourists in Cambodia, where the organization operates. The bikes provided by all these organizations not only allow kids to go to school and parents to get to work, but some even serve as taxis, ambulances, and cargo transportation.

CGP focuses on promoting best practices in international development, and oddly enough most bicycle related non-profits serve as a good models for such practices. The works of these organizations rely on volunteers, donations, and have low-overhead costs. The organizations in the US form partnerships with local organizations in developing countries. The programs are efficient, environmentally friendly, and promote entrepreneurship. While bikes maybe the answer to the developed world’s obesity problem, they are certainly one of the keys to sustainable economic growth in the developing world. -Yulya SpantchakResearch AssociateCenter for Global Prosperity

Tuesday, October 20, 2009

Kristof and WuDunn’s Half the Sky takes me back to Mumbai and Colombo and Beijing and Tegucigalpa where I’ve listened to stories from women who have suffered--many of whom live to tell their story with a mind-blowing hope that gives me confidence to believe in a destructive force of good that will ultimately strip the power from the evil that tortured them.

Half the Sky guts you with the ravaged vulnerabilities of women and girls but builds a rousing case that women’s power as “economic catalysts” can transform the world.

Kristof and WuDunn focus on unlocking the economic power of women in poverty, and this must happen. But women in poverty have allies in their sisters with resources all over the globe. These woman have been a major source fueling the increase in giving to many of the international causes that rescue and care for the women who tell their stories in Half the Sky.

Turns out that a particularly loyal group of donors are professional women in their late 30’s. According to research by Daryl Upsall and Owen Watkins and reported in the Chronicle of Philanthropy 38-40 year old professional females have staying power as compared to a large percentage of 20-something donors who gave after face-to-face recruitment but stopped giving within the first year.

Donor fatigue can be a threat to sensationalized causes like these that succeed in cashing in on short-lived emotionally driven contributions. Perhaps the faithfulness of this new donor makes her an ally to be cultivated by thoughtful organizations committed to the long-haul. Additionally, many donors are guilty of a willingness to only fund new projects, perhaps this cohort of generous and committed professional women are also more likely to be contributors who stick to longer term efforts freeing up organizational capacity and giving effective organizations the ability to out-run, out-wait and out-maneuver the evil that victimizes with a seemingly bottomless supply of creativity.

Tuesday, October 13, 2009

On October 6th, 2009 the Center for Science in Public Policy at the Hudson Institute held a panel discussion on the concept of Health Cooperatives. A uniting issue with health cooperatives is the public’s lack of familiarity and understanding of the concept. To give perspective on the U.S health care plan, Jerry Norris opened the conference by giving examples of cooperatives abroad.

In the 1920s, mutual aid societies or cooperatives were formed in Japan to organize healthcare services for agricultural workers. After WWII, the U.S. Occupation authorities used the cooperative model to design what is now known as Japan’s National Health Insurance System. In the late 1970s, USAID helped South Korea to reform its healthcare program. Cooperative principles were again used in the design of demonstration projects. Subsequently, South Korea followed the Japanese model and promoted a national health insurance program which now covers almost 90% of its population.

One of the largest health cooperatives in the world is in Brazil and is called UNIMED. UNIMED has approximately 18 million members across the country and provides a comprehensive set of health services ranging from primary to tertiary care on a prepaid basis. The urban health cooperative in Sao Paulo covered some 6 million of the city’s poorest citizens and with roots in the public sector, it’s private sector metamorphosis provides an interesting contrast and context to the current US healthcare debate.

In 1998, a new Secretary of Health was appointed by the Mayor of Sao Paulo. The Secretary was an engineer with no experience in health. The Secretary concluded that any reform he instituted could not be worse than the existing public system. He made an offer that the public physicians could not refuse—go private with cooperatives: “I will pay you three times what you now earn; you can elect your own presidents for each cooperative; you will have the sole authority to hire and fire all personnel; and you can do your own procurements, but in return for this, I want only one concession from you, you will have to work.”

Over a period four months, staff from Harvard Medical School evaluated this urban cooperative in Sao Paul and confirmed that it did provide a level of services which equaled anything that could be found in the private sector and that these services were being provided at no greater cost than if all the cooperative members were still covered by public finance.

While the conference went on to discuss health cooperative viability in the U.S, it is through these stories that the public can gain a better idea of the history health cooperatives have had throughout the world. The example of cooperatives created in Brazil are particularly interesting because it shows the opposite transition to what many would like to see happen in the United States.

As many Americans are unfamiliar with the concept of health cooperatives it is helpful to look at our neighbors and draw on others experiences. No one country’s healthcare system is perfect, but in the quest for reform, it is important to look at all different models and experiences.

Tuesday, October 6, 2009

Last week the Bill and Melinda Gates Foundation announced the launching of a social investment fund which will provide loan financing to both non-profits and businesses. $400 million is allotted to this new endeavor, and investments will begin by the end of 2009. Social investment, put simply, is an investment that has both a financial and a social return. The measurement of social returns is a topic that deserves its own blog post, but the point here is that social investment is on the rise. Other foundations, such as Skoll, have begun focusing on investing in social entrepreneurs or in funding social enterprise funds, deviating from the typical grant giving role of a foundation. Likewise, the Calvert Foundation claims to “focus on investment capital, rather than conventional philanthropy” in addressing social problems.

The recent move by Gates is indicative of an overall growth in socially responsible investing (SRI) which is seen both in the typically philanthropic world of foundations and in the corporate world. The Social Investment Forum in its 2007 annual report noted that SRI has risen from $639 billion in 1995 to $2.71 trillion in 2007, a growth of over 300%. According to the report, a large growth of this trend in the US is attributable to the growing concern over climate change, which has increased investment in green technology and alternative fuel research. The growth in SRI is significant both domestically and internationally.

Internationally, the expansion of microfinance organizations has provided a channel for social investment where a social and a capital return is produced. Beyond microfinance, social investment in international development is also targeting small and medium enterprises. Private equity firms such as SpringHill Equity Partners provide capital specifically in emerging markets where financial returns are lower, however those returns are accompanied by “measurable social benefits”. The Africa Middle Market Fund, while still waiting on capital, aspires to do similar work in by investing in African businesses and producing both a financial return and social improvement.

Development in the past has been dominated by foreign aid, philanthropy, and to a certain degree foreign direct investment. While philanthropy and FDI lie on two opposite ends of a spectrum, and social investment may finally be the long-awaited middle ground. -Yulya SpantchakResearch AssociateCenter of Global Prosperity

About Me

The Center for Global prosperity provides a platform-through conferences, discussions, publications, and media appearances-to create awareness among U.S. and international opinion leaders, as well as the general public, about the central role of the private sector, both for-profit and not-for-profit, in the creation of economic growth and prosperity in any country.
The Center's core product is the annual Index of Global Philanthropy and Remittances, which details the sources and magnitude of private giving to the developing world. The Index reframes the discussion about the roles of public and private sectors in foreign aid by showing that the full scale of a country's generosity is measured not just by government aid, but by private giving as well. These private financial flows-including philanthropy and volunteerism from foundations, charities, corporations, universities, and churches as well as remittances-constitute the majority of the developed world's economic engagement with developing nations.